As many hedge funds have joined the rush to real estate deals and development in recent months, Law360 quotes Kasowitz real estate partner Doug Heitner as advising that many small- to medium-sized hedge funds are not traditionally set up for long-term real estate plays or guarantee-laden construction agreements. According to Heitner, “whereas developers and private equity funds and other institutional real estate players are very familiar with the concept of 'bad boy' guarantees — and carry and completion guarantees in development projects — you say the word ‘guarantee’ to a portfolio manager from a hedge fund, and that can bring the conversation to a halt. The whole concept is just anathema to them. In many current setups, the hedge fund is the primary equity partner, putting them on the hook for debt and other guarantees, a situation that is not always comfortable for entities used to business that leaves them with relatively few indemnification responsibilities.” While many larger hedge funds have dedicated teams that understand how to approach these negotiations, Heitner says that for the smaller funds, “this can be a new area for them, [and] oftentimes some of the complexities aren’t ferreted out at the beginning when they go to their credit committee.”